If you are a working professional or a young person starting out with your first job, it is imperative that you learn to start investing your money wisely from the start.
Understanding the power of compounding interest is something that most people need to learn today. If you hold on to your investments for the long term, you allow your money to work for you and generate more returns.
Time plays a huge factor in determining the success or failure of your investments. Investing a few years earlier could mean thousands of dollars of potential returns due to the power of compound interest, helping you save for your retirement easily.
Whether you're an experienced daytrader or about to make your first investment — these investing books will get you up to speed on everything you need to know about investing.
Best Investing Books
Here are some books that will help you get started, and thrive on your investment journey.
1. The Intelligent Investor By Benjamin Graham
“The Intelligent Investor” by Benjamin Graham is widely considered one of the best investing books of all time because it provides a comprehensive framework for analyzing stocks and other investments based on fundamental analysis. Graham, who is often referred to as the “father of value investing,” stresses the importance of investing in stocks that are trading at a discount to their intrinsic value and have a margin of safety.
In the book, Graham also discusses the concept of Mr. Market, which is a metaphor for the stock market as a whole. Graham explains that Mr. Market is often irrational and emotional, and his mood swings can create opportunities for savvy investors to buy stocks at a discount when they are undervalued and sell them at a premium when they are overvalued.
Another key idea in “The Intelligent Investor” is the importance of diversification. Graham advises investors to hold a mix of stocks, bonds, and other assets in order to minimize risk and maximize returns over the long term.
Overall, “The Intelligent Investor” is a great investing book because it offers timeless insights into how to approach investing in a smart, disciplined way. Its principles have stood the test of time and continue to be widely followed by successful investors today.
This book is a must-read if you are looking to deepen your knowledge of the stock market, and how to perform fundamental analysis to buy the best stocks.
2. Security Analysis By Benjamin Graham
“Security Analysis” by Benjamin Graham and David Dodd is another classic investing book that is widely regarded as a great resource for investors. The book was first published in 1934 and is often referred to as the bible of fundamental analysis.
One of the main reasons “Security Analysis” is considered a great investing book is that it provides a rigorous framework for analyzing individual stocks and bonds based on fundamental analysis. Graham and Dodd emphasize the importance of valuing a company's underlying assets, earnings, and future prospects in order to determine its intrinsic value and whether it is trading at a discount or premium to that value.
The book also covers a wide range of topics related to investing, including bond analysis, financial statement analysis, and the role of market psychology in determining stock prices.
Another reason why “Security Analysis” is highly regarded is that it was written during a time of great financial turmoil, just a few years after the stock market crash of 1929. Graham and Dodd's insights and techniques for analyzing investments helped many investors navigate the difficult economic climate of the time and have continued to be useful to investors in subsequent decades.
Overall, “Security Analysis” is a great investing book because it provides a comprehensive and rigorous approach to analyzing investments, based on sound principles of fundamental analysis. Its insights and techniques have stood the test of time and remain highly relevant for investors today.
3. You Can Be A Stock Market Genius By Joel Greenblatt
“You Can Be A Stock Market Genius” by Joel Greenblatt is a great investing book for several reasons. First, it teaches readers how to identify investment opportunities in areas of the market that are often overlooked, such as spin-offs, bankruptcies, and restructurings. These are areas where there is often little competition, providing an opportunity for outsized returns.
Second, Greenblatt's writing style is clear and easy to understand, making the book accessible to investors of all skill levels. He uses real-life examples and case studies to illustrate his points, which helps readers apply the concepts to their own investments.
Finally, the book emphasizes the importance of doing thorough research and analysis before making investment decisions. Greenblatt provides a step-by-step process for evaluating potential investments, which can help investors avoid common pitfalls and make more informed decisions.
Overall, “You Can Be A Stock Market Genius” is a great investing book that teaches readers how to identify investment opportunities in overlooked areas of the market and provides a clear framework for evaluating potential investments.
4. The Essays of Warren Buffett: Lessons for Corporate America By Lawrence Cunningham
Warren Buffett is known the world over for being the ultimate guru on smart and profitable investments, and so it is naturally a good idea to read one of his books and take him at his word.
In the book he talks about finance, investing ideas, acquisitions, valuation of stocks, accounting, and also deals with tax issues.
As the successful chairman of Berkshire Hathaway, he draws on the experience of the company and brings out his basic business principles that have kept the company growing year on year. A must-read!
5. Rich Dad, Poor Dad By Robert Kiyosaki
This classic book is a must-read by Robert Kiyosaki if you are looking to get into wise investments. Kiyosaki differentiates the mentality of the poor and middle class, who just work for money and sacrifice their time, to the rich people, who work hard to learn new things and gain time in the process.
This book stresses on the need for financial independence which is presented as the final goal, which needs to be achieved fast, in order to avoid the rat race of corporate life.
The problem with our educational system is that it teaches us that we need to work hard for the rest of our lives in order to live comfortably, which is a lie. What we really need to be doing in our schools and colleges is imparting financial skills that will help our young ones create wealth, and achieve financial independence.
6. The Warren Buffett Way By Robert Hagstrom
“The Warren Buffett Way” by Robert Hagstrom is a good investing book for several reasons. First, it provides readers with valuable insights into the investment philosophy and strategies of Warren Buffett, one of the most successful investors of all time. Hagstrom distills Buffett's approach into a set of principles that can be applied by individual investors.
Second, the book emphasizes the importance of a long-term, value investing approach, which involves identifying undervalued companies with strong fundamentals and holding them for the long-term. This is a strategy that has proven to be successful over time, and the book provides a roadmap for implementing this approach.
Third, the book is well-researched and contains numerous case studies and examples to illustrate the principles and strategies discussed. This makes the book engaging and accessible to readers of all skill levels.
Overall, “The Warren Buffett Way” is a good investing book that provides readers with valuable insights into the investment philosophy and strategies of Warren Buffett, and a clear framework for implementing a successful long-term, value investing approach.
7. Reminiscences Of A Stock Operator By Edwin Lefèvre
“Reminiscences Of A Stock Operator” by Edwin Lefèvre is a good investing book for several reasons. First, it provides readers with a fascinating and engaging account of the life and career of one of the most successful speculators in history, Jesse Livermore. Livermore's experiences offer insights into the psychology of investing, including the importance of discipline, risk management, and emotional control.
Second, the book provides a historical perspective on the stock market, as it takes place during the early 20th century, a period of significant economic growth and market volatility. The book provides valuable lessons on the cyclical nature of the market, the importance of understanding market trends and conditions, and the risks associated with speculation.
Third, the book is well-written and entertaining, making it an enjoyable read for investors of all skill levels. The use of storytelling and anecdotes makes the lessons more memorable and relatable.
Overall, “Reminiscences Of A Stock Operator” is a good investing book that provides readers with a historical perspective on the stock market, valuable lessons on investing psychology, and an engaging and entertaining story that brings the lessons to life.
8. Margin Of Safety By Seth Klarman
“Margin of Safety” by Seth Klarman is a good investing book for several reasons. First, it emphasizes the importance of investing with a margin of safety, which involves buying securities at a significant discount to their intrinsic value. This approach helps investors protect their downside risk while also increasing their potential for long-term returns.
Second, the book provides practical guidance on how to identify and analyze investment opportunities, including a discussion of valuation techniques, risk management strategies, and the importance of a long-term perspective.
Third, Klarman draws on his extensive experience as a value investor to provide readers with insights into the investment process and the challenges and opportunities of investing in a dynamic and uncertain market environment. He emphasizes the importance of discipline, patience, and a willingness to go against the crowd.
Overall, “Margin of Safety” is a good investing book that provides readers with a clear and practical framework for investing with a margin of safety. It offers valuable insights into the investment process and the importance of discipline, patience, and a long-term perspective.
Things to Remember with Investments
A point to keep in mind – investing early is important, but investing wisely is much more important and therefore good learning and investment skills need to be developed.
The easiest way to do that is by reading the best investing books written by experienced authors.
That being said, here are some important things to remember with investments:
- Diversification: Diversify your investments across asset classes (such as stocks, bonds, real estate, and commodities), industries, and geographies to reduce your risk.
- Time Horizon: Determine your investment time horizon and invest accordingly. If you need the money in the short term, consider lower-risk investments, such as bonds. If you have a longer time horizon, consider higher-risk investments, such as stocks.
- Risk Tolerance: Determine your risk tolerance and invest accordingly. If you are risk-averse, consider lower-risk investments, such as bonds. If you are comfortable with risk, consider higher-risk investments, such as stocks.
- Fees: Be aware of the fees associated with your investments. High fees can significantly reduce your returns over time, so look for investments with low fees.
- Stay the Course: Stick to your investment plan and don't be swayed by short-term market fluctuations or news headlines. Remember that investing is a long-term game, and market volatility is a normal part of the process.
- Stay Informed: Stay up-to-date on the news and trends affecting your investments, and regularly review your portfolio to ensure it is aligned with your investment goals.
- Seek Professional Advice: Consider seeking the advice of a professional financial advisor to help you make informed investment decisions and develop a sound investment plan that aligns with your goals and risk tolerance.
How to Invest if You Aren't Rich?
We all heard the old saying “Make your money work for you” right? Investing can sound tough if you don’t have a lot of money lying around. But investing can be for everyone — even if you only have spare change.
There are apps available that offer the facility to ‘round-up’ your purchases – that is, save the remaining few cents to make up a dollar on your card purchases – and invest them for you.
Taking little to no commissions and acting as a type of fund manager, these investing apps allow you to customize the level of risk you want to engage with. Essentially an investment piggy bank, they provide a way to literally turn your pocket shrapnel into sustainable investments, little by little.
Acorns fees are $1 per month for all accounts with a balance under $5,000 and .25% of the balance per year on accounts over $5,000. Compared to traditional management, mutual funds, and DIY ETFs, this fee is incredibly low.
If you are interested in investing your spare change, I recommend you learn more from Acorns here.
The Bottom Line
These are the best investing books that you must ready today if you are confused about investing.
It's easy to find the world of stocks, bonds and mutual funds intimidating, but the sooner you start investing, the greater your ultimate benefit.
See how you can start investing for beginners in our recent and easy to follow article.